Discursive Legitimation in Public Tax Disclosures: The Case of UK Corporate Tax Strategy Reporting

This paper examines ways in which companies construct compliance with HMRC tax strategy regulation to promote their corporate tax transparency during times of public controversy and concern over reports of multinational companies’ (MNCs’) tax avoidance behaviour. We conduct a comparative in-depth case study of the tax strategy reports of seven FTSE 100 companies (2016-2019), who incorporated a chief financial officer (CFO) statement or a chairman statement in their tax strategy reports as a means to demonstrate full engagement with HMRC tax strategy regulation. We look at the case of the first iterations of this new corporate reporting genre to identify the key themes disclosed in the companies’ tax strategy reports and to analyse the discursive legitimation strategies used to construct those themes. For this purpose, we use critical discourse analysis (CDA) which highlights the constitutive role of language in the construction of social reality. Our findings suggest that companies utilize three overarching legitimation means, namely (1) discursive antagonism, (2) discursive co-optation and (3) discursive validation to portray “a coherent and legitimate [tax] image” that appeals to a diverse group of stakeholders beyond the regulatory body. This is important because this offers insights that can help stakeholders better understand and interpret the tax strategy disclosures.